Expense Ratio

What is an Expense Ratio?

An Expense Ratio is the fee that a mutual fund or an ETF charges against your investment each year.

For example, if a fund has an expense ratio of 1% and you have $10,000 invested, the annual expense is $100. This does not sound too bad, but if you have $250,000, the annual expense is $2,500 — that’s a lot of money!

What is an expense ratio? It is a fee that a mutual fund or ETF subtracts from your total investment each year for their service. Can that small fee have such a significant impact on long-term investment performance? Is it better to invest in low-cost index funds? The answer is a resounding YES because a … Read moreHow 1% Expense Ratio Kills Your Investment Returns

A mutual fund represents money contributed by multiple investors. That money is managed by an individual, or more likely, a whole slew of individuals. Not surprisingly, those folks who help manage and oversee your money do not do it on a volunteer basis. They get paid. Do you want to guess who pays them? You … Read moreWhat are Mutual Fund Expense Ratio and Fees?

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